2022 (9) TMI 374 - HC - GST

Levy of penalty - seizure of goods - Part-B of the e-way bill was not filled on technical glitch - intent to evade present or not - HELD THAT - It is clear that the only allegation levelled against the petitioner leading to seizure of the goods was that Part-B of the eway bill was not filled up. There is no allegation that the goods being transported were being transported without payment of tax. The explanation offered by the petitioner for not filling the Part-B of e-way bill, is clearly supported by the Circulars issued by the Ministry of Finance wherein the problem arising in filling the part-B of e-way bill was noticed and advisories were issued. In the present case, prima-facie no intent to evade the duty can be ascertained, only on the allegation that Part-B of the e-way bill was not filled, more so, in view of the fact that the vehicle in which the goods were being transported on a Delhi number. The writ petition is allowed with direction to the respondents to refund the amount collected and paid by the petitioner in pursuance to the impugned order within a period of two months from today.

Summary

Issues:
Challenge to demand/penalty order dated 18.04.2018 and appellate order dated 14.05.2019; Refund of penalty amount; Allegation of incomplete e-way bill leading to goods seizure.

Analysis:
The petitioner, a company engaged in Trading of Ready-made garments, challenged the demand/penalty order and the appellate order passed by the authorities. The issue arose when the respondent inspected the goods being transported by the petitioner's vehicle and found the e-way bill incomplete, leading to goods' detention and subsequent seizure. The petitioner explained that a technical glitch resulted in the e-way bill's Part-B not being filled, as the vehicle number was not registered due to a technical error. The petitioner argued that the department acknowledged this technical issue in a Clarificatory Circular, advising on the correct form filling. The petitioner contended there was no intent to evade duty, supported by the Circulars issued by the Ministry of Finance addressing similar issues.

The petitioner highlighted the Circular dated 14.09.2018, emphasizing that minor errors, such as missing digits/characters in the vehicle number, should not invoke penalty under section 129 of the CGST Act. The petitioner also referenced a previous judgment where the court set aside a seizure order in similar circumstances. The Standing Counsel defended the impugned order, disputing the technical glitch explanation provided by the petitioner.

The Court noted that the only allegation against the petitioner was the incomplete Part-B of the e-way bill, with no accusation of tax evasion. The petitioner's explanation for the error was supported by Ministry Circulars addressing such problems. The Court found no intent to evade duty, especially considering the vehicle's Delhi number registration, similar to a previous judgment's scenario. Consequently, the impugned orders were set aside, and the writ petition was allowed, directing the respondents to refund the amount paid by the petitioner within two months.

In conclusion, the Court ruled in favor of the petitioner, emphasizing the technical nature of the error in the e-way bill and the absence of any intent to avoid tax payment. The judgment underscored the importance of considering technical glitches and relevant circulars in such cases to prevent undue penalization.